SecProbe.io

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                               THE BEARD COMPANY
                          Enterprise Plaza, Suite 320
                                 5600 North May
                         Oklahoma City, Oklahoma 73112

                                Fax 405/842-9901
                             Telephone 405/842-2333

                                November 16, 2005

                                                          FEDERAL EXPRESS
                                                          ---------------

Mr. John Cash
Accounting Branch Chief Division of
Corporation Finance
Securities and Exchange Commission
Washington, D.C. 20549-0510

Dear Mr. Cash:

The following is offered in response to your letter of October 7, 2005 regarding
the Form 10-K of The Beard Company (the "Company" or "Beard"):

SEC October 7, 2005, comment 1, bullet point 1
----------------------------------------------

Attached as Schedule 1 is an analysis prepared by Lisle Compton Cole & Almen LLP
("Lisle Compton") that is responsive to this request.

As the Schedule indicates, Cibola Corporation ("Cibola") issued preferred stock
in exchange for all of the common stock of Mainline Enertech Corporation
("Mainline"), with the Cibola preferred stock equal to the Mainline common
stock. Since the preferred stock is not redeemable, Cibola did not accrete the
discount. The exchange was treated as an exchange of interests between
enterprises under common control as the minority shareholders of Cibola were the
shareholders of Mainline. The book value of Cibola's preferred stock carried
over from the book value of Mainline's common stock.

None of the notes receivable reflected on the books of Cibola for the periods in
question were for the issuance of preferred stock. They were entered into for
investment purposes. The notes receivable from The Beard Company, other than for
the purchase of the common stock, were for advances on the quarterly
distributions by Cibola and were paid in full by April 15 of the subsequent
year.

SEC October 7, 2005, comment 1, bullet point 2
----------------------------------------------

Attached as Attachment 1 is a Valuation Summary prepared by Lisle Compton (the
attached transmittal letter to Mr. Black and Notes to the Valuation Summary are
an integral part of the Valuation Summary). The first two pages of the
Attachment show a summary of the book value of Cibola on December 31 of each
year from 1996 through and including 2004, as well as its book value as of March
31 and June 30, 2005. Lisle Compton made several assumptions. In that regard, we
note the following:

     1.   All privately held securities are shown at cost. A substantial
          discount could have been taken for many of those privately held
          securities, as the vast majority of them are illiquid, minority
          positions.

     2.   With respect to the notes receivable, those are also shown at cost,
          without any discount for collectibility risks. All of the notes are
          from private individuals or closely-held entities, so a discount for
          collection risk would be appropriate. One of the notes included at
          cost in 1997 (the year it was issued) ended up being written off as
          uncollectible in 2000. Nevertheless, it was valued at cost in 1997
          through 1999. Also, the Promissory Note from Beard for its purchase of
          the common stock is included as a note receivable.

     3.   The value of the gas contracts (which is shown in the "Discounted
          future cash flow stream (net of tax)" line) was calculated based on a
          "risk free" cash flow analysis. There were basically two long term gas
          contracts underlying that cash flow. The first was a contract to sell
          a specified quantity of natural gas (the "Sales Contract") to a third
          party at a price, which escalated at approximately 5% per year, that
          would average, over the final year of the contract term, approximately
          $3.35 per MMBtu. The other contracts were contracts to purchase
          similar quantities of natural gas from Williams Energy (the "Purchase
          Contracts") at predetermined prices which were less than the Sales
          Contract prices. There was a substantial risk during the time period
          at issue (and especially 2001-2002) that Williams Energy would default
          in its obligation to deliver gas to Cibola under that contract
          (because, as you may be aware, Williams Energy was, according to
          published reports, apparently close to filing for bankruptcy
          protection). If, whether due to its severe financial problems or for
          other reasons, Williams Energy had ceased delivering gas, Cibola would
          have been forced to purchase gas in the market to fulfill its
          obligation.

     4.   Under the Sale Contract described above; that would have resulted in a
          substantial loss to Cibola because the market price during that time
          period was in excess of $3.35 per MMBtu. Our point is that a
          substantial risk-based discount could justifiably be taken with
          respect to the gas contract cash flow stream, but it was not taken for
          purposes of this analysis.

As the Attachment indicates, the value of Cibola varied from a low of
$21,430,000 on December 31, 1996 to a high of $27,350,000 on June 30, 2005.
These values are all, however, well below the $50,000,000 liquidation preference
cited in the Certificates of Amendment Designating the Preferences, Limitations
and Relative Rights of Cibola Corporation Preferred Stock (previously provided
to you on July 7, 2005).

SEC October 7, 2005, comment 1, bullet point 3
----------------------------------------------

Cibola did not ask Lisle Compton to allocate the fair value of Cibola between
its preferred and common stock. However, given that the value of Cibola's
investment securities and cash flow stream were always significantly below the
redemption price/liquidation preference for the preferred stock, the preferred
stock should represent most, if not all, of the value of Cibola. Accordingly, no
allocation of the determined fair value of Cibola between its preferred and
common stock is provided.

The shares of Cibola owned by Beard are pledged as collateral on the note
payable issued by Beard in payment for such shares. There is no marketability
for the shares as they may not be sold by Beard to any third party. The
liquidation preference places the preferred shareholders in a senior position to
other equity. Given that the value of Cibola is less than the liquidation
payment, then the common shares have no value and Beard will receive nothing,
other than the cancellation of the Nonrecourse Secured Promissory Note and the
related security interest, upon the termination of the arrangement as a result
of the exercise of the Call Option by the minority shareholders.

SEC October 7, 2005, comment 1, bullet point 4 sub bullet 1
-----------------------------------------------------------

Until December 31, 1995, Cibola or its predecessor conducted extensive gas
trading activities. However, effective as of December 31, 1995, Cibola
transferred substantially all of its active gas trading operations to Cibola
Energy Services Corporation, leaving Cibola owning only the Sales Contract. The
Purchase Contracts were entered into by Cibola shortly thereafter. Cibola Energy
Services Corporation was owned by Messrs. Dunning, Hartzog and Black. In July
1996, Cibola Energy Services Corporation, the entity which conducted actual gas
trading operations, was acquired by TransCanada Pipelines in exchange for stock
in TransCanada. As a result, Cibola does not have personnel with appropriate
experience to actively market natural gas. After 1996, Cibola management opted
not to actively market gas (outside of the Sales and Purchase Contracts
discussed above). After July 1996, Messrs. Dunning, Hartzog and Black's only
involvement in gas trading was through Cibola, which only held the
aforementioned Sales and Purchase Contracts (collectively, the "Gas Contracts").

As you will note from the Summary of Gas Contracts (Schedule 2), the Gas
Contracts all expired in August 2005. Now that the contracts have expired, the
minority shareholders on November 4, 2005 delivered a letter agreement to the
Company confirming their intention to exercise the Call Option effective as of
12:01 a.m. on December 1, 2005. This agreement was accepted by the Company on
November 7, 2005. A copy of this agreement is attached as Attachment 2.

SEC October 7, 2005, comment 1, bullet point 4 sub bullet 2
-----------------------------------------------------------

The question regarding the fair value of the going concern aspect of the
business is answered by Lisle Compton's analysis in Attachment 1, which includes
the discounted future cash flow from the Gas Contracts. As noted in Appendix II
to such Attachment, Lisle Compton in their valuation did not adjust for the
possibility of a default risk. As pointed out in comment 1, bullet point 1
above, there was considerable risk during 2001-2002 that Williams Energy might
default on its obligation to deliver gas to Cibola which would have created a
substantial loss to Cibola.

Cibola is not currently engaged in (and has not been engaged in for about 10
years) what would normally be described as an actively operated business which
possesses any "goodwill" or "going concern" value, because Cibola's activities
were limited to managing the Gas Contracts (all of which have now terminated)
and its equity and debt securities. Cibola has only one employee and one small
office, both of which are located in Cody, Wyoming. Managing those investment
securities requires minimal day-to-day oversight.

SEC October 7, 2005, comment 1, bullet point 5, sub bullets 1 to 4
------------------------------------------------------------------

When referring to "minority shareholders," we assume the SEC is referring to
Larry Hartzog, Mike Black's revocable trust, and Rick Dunning's family limited
partnership, which collectively own 20% of the common stock and 100% of the
preferred stock. There is no reason that those shareholders should be considered
a "group," as there is not, to the knowledge of Cibola's general counsel, any
voting agreement among them. They do, however, share in the desire to maintain
control over Cibola's operations, because those shareholders are knowledgeable
about the underlying Gas Purchase and Sale Contracts discussed elsewhere in this
response. Further, as discussed below in our response to bullet point 7, it is
not necessary for there to be any agreement between the minority shareholders to
act as a group to preclude the necessity of consolidation---there only needs to
be the possibility of their voting as a group to demonstrate the ability to
effectively participate in significant decisions and, in so doing, block the
requirement, in this case, of consolidation.

With respect to the SEC's question about how Cibola's decisions are made, the
decisions within Cibola are generally made in the same manner as any other
corporation. That is, the Board of Directors (on which only two of Beard's
executives serve; Messrs. Dunning, Hartzog and Black are the other three
directors) appoints the officers to carry out the policies dictated by the Board
and then monitors the officers' performance. The officers are responsible for
the day-to-day activities of Cibola. None of Beard's executives have served as
officers of Cibola in the last five years. Those shareholders holding the voting
common stock have the authority to remove the directors, and their vote is also
required to approve certain fundamental corporate transactions (such as sales of
substantially all of Cibola's assets, mergers, etc.). The majority shareholders
do not participate in the management of Cibola, nor do they have the authority
to act for or on behalf of Cibola. See bullet point 7 below. The Company is not
aware of any agreements or documents (other than the Articles of Incorporation
or Bylaws) which would alter this general decision-making process as it applies
to the corporate governance of Cibola.

Enclosed as Attachments 3 and 4 are copies of Cibola's Articles of Incorporation
and Bylaws, respectively.

SEC October 7, 2005, comment 1, bullet point 6
----------------------------------------------

See the attached Schedule 3 for an analysis of the effect of Cibola on the tax
return of Beard. As Schedule 3 indicates, there have been no "tax benefits" to
Beard.

SEC October 7, 2005, comment 1, bullet point 7
----------------------------------------------

The Company has again concluded, after an exhaustive analysis, as requested, of
Emerging Issues Task Force ("EITF") 96-16 that the financial statements of
Cibola should NOT be consolidated with those of The Beard Company. To reiterate,
it is the Company's position that it is the minority shareholders, and not the
majority shareholders, that control the operations of Cibola. Financial
Accounting Standards Board ("FASB") No. 94, Consolidation of All Majority-Owned
Subsidiaries, indicates that "consolidation is appropriate when one entity has a
controlling interest in another entity and that the usual condition for a
controlling interest is ownership of a majority voting interest, but the
STATEMENT ACKNOWLEDGES THAT IN SOME CIRCUMSTANCES CONTROL DOES NOT REST WITH THE
MAJORITY OWNER...THESE (MINORITY) RIGHTS MAY BE SO RESTRICTIVE AS TO CALL INTO
QUESTION WHETHER CONTROL RESTS WITH A MAJORITY OWNER (emphasis added)."

The Task Force for the EITF, in analyzing this issue, determined that in making
a determination as to whether the rights of the minority shareholder "should
preclude an investor from consolidating when the investor has a majority voting
interest in an investee is a matter of judgment that depends on the facts and
circumstances." The Task Force "further agreed that the framework in which such
facts and circumstances should be judged should be based on whether the minority
rights, individually or in the aggregate, provide for the minority
shareholder(s) to effectively participate in significant decisions that would be
expected to be made in the 'ordinary course of business". The EITF went on to
differentiate between "protective" and "participating" rights. The Task Force
"agreed that substantive minority rights that provide the minority shareholders
with the right to effectively participate in significant decisions that would be
expected to be related to the investee's ordinary course of business, although
also protective of the minority shareholder's investment, should overcome the
presumption in Statement 94 that the investor with a majority voting interest
should consolidate its investee."

Participation is defined as meaning "THE ABILITY TO BLOCK ACTIONS proposed by
the investor who has a majority voting interest...thus, the investor with the
majority voting interest must have the minority's agreement to take certain
actions...participation does not mean the ability of the minority to initiate
actions (emphasis added)." The 5-day Call Option of the minority shareholders to
force the sale by the majority shareholders of their common shares to the
minority shareholders, the fact that three minority shareholders hold seats on a
five-member Board of Directors, and the fact that all of the officers of the
entity are minority shareholders and it is they who direct the day-to-day
operations of Cibola constitute prima facie evidence that the minority
shareholders have "the ability to block actions proposed by the investor who has
a majority voting interest" and, further, that those minority shareholders have
the ability and the "right to effectively participate in significant decisions
that would be expected to be made in the ordi